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Report No. : |
341140 |
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Report Date : |
16.09.2015 |
IDENTIFICATION DETAILS
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Name : |
AAROHI DIAM |
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Registered Office : |
23 Tuval Street Diamond Exchange, Noam Bldg. Ramat Gan 5252238 |
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Country : |
Israel |
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Date of Incorporation : |
14.11.1986 |
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Legal Form : |
Private limited company |
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Line of Business : |
Traders,
polishers, importers and exporters of diamonds of all types (large and small,
from 10 carats to larger than 25 carats). |
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No. of Employees : |
7 (2014) |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31, 2015
|
Country Name |
Previous Rating (31.12.2014) |
Current Rating (31.03.2015) |
|
Israel |
B1 |
B1 |
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Risk Category |
ECGC Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
ISRAEL - ECONOMIC OVERVIEW
Israel
has a technologically advanced market economy. Cut diamonds, high-technology
equipment, and pharmaceuticals are among the leading exports. Its major imports
include crude oil, grains, raw materials, and military equipment. Israel
usually posts sizable trade deficits, which are covered by tourism and other
service exports, as well as significant foreign investment inflows. Between
2004 and 2013, growth averaged nearly 5% per year, led by exports. The global
financial crisis of 2008-09 spurred a brief recession in Israel, but the
country entered the crisis with solid fundamentals, following years of prudent
fiscal policy and a resilient banking sector. Israel's economy also has
weathered the Arab Spring because strong trade ties outside the Middle East
have insulated the economy from spillover effects. Slowing demand domestically
and internationally and reduced investment due to uncertainties caused by the
Gaza conflict in summer 2014 have reduced GDP growth to about 2% during 2014.
Natural gas fields discovered off Israel's coast since 2009 have brightened
Israel's energy security outlook. The Tamar and Leviathan fields were some of
the world's largest offshore natural gas finds this past decade. The massive
Leviathan field is expected to come online no sooner than 2017, but production
from Tamar provided a one percentage point boost to Israel's GDP in 2013 and a
0.5% boost in 2014. In mid-2011, public protests arose around income inequality
and rising housing and commodity prices. Israel's income inequality and poverty
rates are among the highest of OECD countries and there is a broad perception
among the public that a small number of "tycoons" have a cartel-like
grip over the major parts of the economy. The government formed committees and
has started splitting up the oligopolies to address some of the grievances but
has maintained that it will not engage in deficit spending to satisfy populist
demands. Over the long term, Israel faces structural issues, including low
labor participation rates for its fastest growing social segments - the
ultra-orthodox and Arab-Israeli communities. Also, Israel's progressive,
globally competitive, knowledge-based technology sector employs only 9% of the
workforce, with the rest employed in manufacturing and services - sectors which
face downward wage pressures from global competition.
|
Source
: CIA |
AAROHI DIAM
23 Tuval Street
Diamond Exchange,
Noam Bldg.
RAMAT GAN 5252238 ISRAEL
Telephone 972 3 752 56 42
Fax 972 3 752 56 45
A private limited
company, incorporated as per file No. 51-115134-2 on the 14.11.1986.
Authorized share
capital of NIS 2,640.00, divided into: 2,640 ordinary shares of NIS 1.00 each,
of which 2,500 shares
amounting to NIS 2,500.00 were issued.
1. B.A.N. TRADING & INVESTMENTS, 35%, of the
USA,
2. Rupen Bhansali, 20%,
3. Ashuk Shah, 15%, of India,
4. Ankor Bhansali, 15%,
5. Jay Gotualla, 15%, of India.
1. Rupen Bhansali, General Manager,
2. Ankor Bhansali,
3. Jay Gotualla.
Traders,
polishers, importers and exporters of diamonds of all types (large and small,
from 10 carats to larger than 25 carats).
70%-80% of sales
were for export in 2014 (was 60% in 2012 – see more in CHARACTR).
Operating from
offices premises, owned by the shareholders, on an area of 180 sq. meters, in
23 Tuval Street (also referred to as 52 Bezalel Street), Diamond Exchange, Noam
Building, 1st floor, Room #101, Ramat Gan, and from subsidiaries in
Belgium and India.
Had 7 employees in
mid 2014 (had 8 employees in the beginning of 2013), current number
unavailable.
Financial data not
forthcoming.
However we were
informed that subject owns 400 sq. meters office space in Yahalom Building in
the Diamond Exchange, which is very highly valued. This office space is being
leased to 3rd parties (hence subject enjoys revenues from leasing
fees).
There are 5 charge
for unlimited amounts registered on the company's assets, in favor of Israel Discount
Bank Ltd. and Bank Leumi Le'Israel Ltd. (last charge placed in 2008).
2011 sales claimed to be US$ 50,000,000, of which 60% were for export.
2012 sales claimed to be US$ 50,000,000, of which 60% were for export.
2013 sales claimed to be US$ 30,000,000, of which 70%-80% were for
export (see below regarding the drop in sales).
Later sales figures not forthcoming.
A.D. DIAMONDS, a
subsidiary in India,
Having also a
subsidiary in Belgium, name unavailable.
AAROHI INVESTMENTS
& ASSETS LTD.
AAROHI DIAM
AAROHI DIAM
AAROHI DIAMONDS
PVT LTD., India,
AAROHI DIAMONDS
LLC, Dubai, UAE.
Israel Discount
Bank Ltd., Diamond Exchange Branch (No. 080), Ramat Gan.
Nothing
unfavorable learned.
Despite our efforts, we were unable to speak with subject's officials,
as they were always unavailable. We directed to the General Manager, who was
always too busy to take our calls, so we left a message. We will also try to
call in a later day, in case we do not get response, and update you once we
receive fresh data.
Subject is a
veteran diamond firm in the local diamond industry. According to our sources, the
company enjoys very good reputation.
In mid-2014
subject's official informed us that they were decreasing local activity, and
increasing international activity, opening 2 subsidiaries in India and Belgium.
In the end of 2002, subject was officially recognized by the Israel-Asia
Chamber of Commerce for its contribution to the development of bilateral trade
between the two countries.
In October 2004, it was reported that subject opened a new
office in Hong Kong.
Israel's diamond industry
continued the growth trend in all trade parameters in 2014, after the
impressive growth in 2013 in most parameters, based on the data by Israel's
Diamond Administration (IDA) at the Ministry of Economics: Net export of
polished diamonds rose by 0.6% from 2013, reaching US$6.269 billion (after
rising 11.6% in 2013), and net rough diamond exports totaled US$3.061 billion
in 2014, up 4.2% from 2013 (after a mere rise in 2013). The market has been
volatile over the last years after experiencing its worst depression due to the
global economic crisis, then recovered in 2010 but fell again in 2012. The
recovery in 2013 and 2014 is positive news for the local branch (still away
from its peak on the eve of the crisis with export of polished diamonds of US$
7 billion), however it is reported that profit margins have been decreasing due
to smaller gaps between rough and polished diamond prices (leading the diamond
dealers to search for new rough sources in hope to decrease costs). Overall,
IDA reports that 2014 was tough year for the diamond industry in Israel and
globally.
Net imports of
polished diamonds in 2014 totaled US$4.514 billion, and net import of rough
diamonds totaled US$ 4.022 billion, marking 4.8% and 0.8% increase from 2013,
respectively (in 2013 import was in similar levels to 2012).
The United States
continued to be Israel’s major market for polished diamonds, accounting for
30.8% of the market in 2014 (37% in 2013). Hong Kong is the next largest market
with 29.7% of exports (27% in 2013), with Belgium 8.5%, Switzerland 6.5%, and
U.K. accounting for 3.7% of Israel's polished diamond export.
According to the
President of the Israeli Diamonds Association, in 2010 the trade in the local
diamond sector rolled annual turnover of US$ 25 billion while total debt to the
banks stood on US$ 1.5 billion, down from US$ 2.4 billion in the eve of the
global crisis.
In February 2009,
Israel was ranked as the world’s largest exporter of cut diamonds, followed by
India, Belgium and South Africa.
Local diamond sector
employs some 20,000 persons.
An affair of an
underground bank shocked the local diamond branch, after in late January 2012
Police raided the Diamond Exchange (after a long undercover operation),
arrested several individuals for investigation, caught diamonds and various
assets worth NIS millions, and blocked several bank accounts. It is suspected
that a group of people, including diamond dealers, run an illegal bank in the
Diamond Exchange compound for loans, money transfer abroad based on fictitious
transactions and exchange in volume of NIS 1 billion for several years.
The affair led to
several of reported bankruptcies of local diamond firms, a decrease of up to
70% in transactions in 2012, frozen bank accounts, and for a while to paralysis
(especially in purchase of raw diamonds) due to uncertainty among local and
foreign dealers.
In March 2012 the
Police decided to lower the profile of the investigation for a while a result
of the big pressure from the diamond branch (to stop the continuing damage
inflicted) and the Government (who is losing US$ hundred millions from decrease
in tax collection). In November 2012 the Police and Tax Authorities recommended
on indictments against the 25 suspects in the affair, among them diamond
dealers, for the said suspicions and obstruction of the investigation.
In June 2013 it
was reported that the Police resumed its raids on the diamonds branch, and
although names of suspects were not released, sources said that it is also
related to the above underground bank affair. In parallel, it is also reported
that the Tax Authorities and diamonds dealers' representatives are trying to
reach an arrangement for past debts.
In July 2014 3
indictments were filed to the Tel Aviv District Court against central
defendants in the affair, who provided foreign currency services to the
"underground bank" (not against diamond dealers at this stage), for
felonies of money laundering and tax evasion in volumes of US$ millions.
Notwithstanding the lack of updated data from subject's officials,
considered good for trade engagements.
Note: "POB
4" which you gave in the address is an internal postal box in the Diamond
Exchange. Please also note the correct telephone numbers in caption.
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From time immemorial, India is well known in
the world as the birthplace for diamonds. It is difficult to trace the
origin of diamonds but history says that in the remote past, diamonds were
mined only in India. Diamond production in India can be traced back to almost
8th Century B.C. India, in fact, remained undisputed leader till 18th
Century when Brazilian fields were discovered in 1725 followed by emergence of
S. Africa, Russia and Australia.
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The achievement of the Indian diamond
industry was possible only due to combination of the manufacturing skills of
the Indian workforce and the untiring and unflagging efforts of the Indian
diamantaires, supported by progressive Government policies.
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The area of study of family owned diamond
businesses derives its importance from the huge conglomerate of family run
organizations which operate in the diamond industry since many generations.
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Some of the basic traits of family run
business enterprises include spirit of entrepreneurship, mutual trust lowers
transaction costs, small, nimble and quick to react, information as a source of
advantage and philanthropy.
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Family owned diamond businesses need to
improve on many fronts including higher standard of corporate governance,
long-term performance – focused strategies, modern management and technology.
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Utmost caution is to be exercised while
dealing with some medium and large diamond traders which are usually engaged in
fictitious import – export, inter-company transactions, financially assisted by
banks. In the process, several public sector banks lost several hundred million
rupees. They mostly diverted borrowed money for diamond business into real
estate and capital markets.
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Excerpts from Times of India dated 30th
October 2010 is as under –
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Gem & Jewellery Export Promotion Council
in its statistical data has shown the export of polished diamonds to have
increase by 28 % in February 2013. Compared to $ 1.4 bn worth of polished
diamond export in February, 2012, India exported $ 1.84 billion worth of
polished diamonds in February 2013. A senior executive of GJEPC said, “Export
of cut and polished diamonds started falling month-wise after the imposition of
2 % of import duty on the polished diamonds. But February, 2013 has given a new
ray of hope to the industry as the export of polished diamonds has actually
increased by 28 %. It means the industry is on the track of recovery and
round tripping of diamonds has stopped completely.” Demand has started coming
from the US, the UK, Japan and China. India’s polished diamond export is
expected to cross $ 21 bn in 2013-14.
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The banking sector has started exercising
restraint while following prudent risk management norms when lending money to
gems and jewellery sector. This follows the implementation of Basel III accord
– a global voluntary regulatory standard on bank capital adequacy, stress
testing and market liquidity.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
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Indian Rupees |
|
US Dollar |
1 |
Rs.66.44 |
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UK Pound |
1 |
Rs.102.41 |
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Euro |
1 |
Rs.75.05 |
INFORMATION DETAILS
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Analysis Done by
: |
TRI |
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Report Prepared
by : |
VNT |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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-- |
NB |
New Business |
-- |
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This score serves as a reference to assess
SC’s credit risk and to set the amount of credit to be extended. It is
calculated from a composite of weighted scores obtained from each of the major sections
of this report. The assessed factors and their relative weights (as indicated
through %) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend (10%) Operational size
(10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.